This Briefing Paper explores the concept of people-based business intelligence, an emerging approach to people management that moves reporting and analysis away from inward-looking HR metrics into a broader business context. Made possible by a combination of software tools, process automation and evolving people management priorities, business intelligence gives organisations greater insight into their employee base and helps propel Human Capital Management up the boardroom agenda.
The Briefing Paper argues that:
Senior management teams struggle to get the information they need about their employees because so much reporting is rooted in the inner workings of the HR department. While operational HR indicators have an important role to play, people-based business intelligence provides a deeper insight into underlying trends, meaning and business context.
People-based business intelligence transforms the scope of HR reporting and analysis. Measures range from operational efficiency (‘How fast are you recruiting?’) to effectiveness (‘Are you recruiting the right people?’); from cost assessment to trend analysis; and from ad hoc ‘what if?’ analysis to strategic workforce planning.
While some components of people-based business intelligence software have been available for the best part of a decade, take-up has been relatively slow. Adoption levels are likely to increase, however, with the emergence of easy-to-use software tools, context-rich management dashboards and distribution mechanisms such as employee portals. Business intelligence capability is also starting to be offered as a hosted service, where the provider takes on the IT burden of running the software and the customer accesses it over the internet.
One prerequisite for people-based business intelligence is an effective data management strategy, pulling together people-related information and centralising access to it. Many organisations will look to use their HR Management System as the ‘central source of truth’ for people-related activities, inside and outside the HR department. Taking this approach doesn’t simply improve business intelligence: it also helps simplify complex, multi-function activities such as onboarding.
Traditional approaches to software projects tend to focus on automation ahead of business intelligence, partly because automation tackles highly visible inefficiencies. As a result, business intelligence initiatives are often relegated to a second phase of implementation – and frequently forgotten in the face of more pressing day-to-day priorities. Webster Buchanan Research believes that the two components should go hand-in-hand: automation, after all, generates much of the data needed for effective business intelligence, which in turn gives organisations greater insight into their operational efficiency.
While improvements in software provide the platform for business intelligence, some HR functions lack the necessary analytical skills to make the most of the outputs. In the future, service providers are likely to step in to offer these skills as an additional outsourced service.